Is the ‘Golden Age of Home Ownership’ Over?

There is something very quintessentially British about wanting to own your own home. In recent decades it has become a National obsession and you can’t move for all the property programmes on the TV, which often seduce you into thinking that property development is a cakewalk and the key to untold riches. It also seems that we’ve come to expect a massive profit when we sell our home. However, according to a recent report by the Chartered Institute of Housing, home ownership in this country could be on the decline as mortgages for all could be a dim and distant pipedream.

One reason for this pessimistic conclusion is the fact that although 100,000 homes are expected to be built in 2010, the number of new households each year is double that figure and is expected to be so for the next 11 years. The study talks about the “in-betweens” – those earning typically more than £12,000, but less than £25,000, who are too poor to make it onto the property ladder but too well off to warrant social housing. The Council of Mortgage Lenders (CML) says that first-time buyers now have to put down an average of £35,000 as a home deposit.

Taking these factors into account, the estate agency Savills predicts that, by 2020, 20% of will be privately rented. Today that figure is 15% and was as low as 9% in 1988. At the other end of the scale it predicts that owner-occupied houses will make up 62% of total households in 2020. At present that figure stands at 67% and was at an all time high of 71% in 2003.

By contrast, countries like Germany and France have a different mentality to property tenure; figures for 2007 show that just 56% of French and 43% of German households were owner-occupied. Although it must be noted that the legal systems of our continental neighbours tend to give tenants more freedom to do things like decorate and own pets. Another factor that suggests Britain will never reach the tenant levels of these countries is the fact that most Britons tend to plan for modest pension levels in the expectation that the mortgage will be paid off before retirement.